Trump plan to overhaul U.S. infrastructure faces steep hurdles

WASHINGTON (Reuters) – U.S. President Donald Trump will roll out an infrastructure plan on Monday that already faces significant hurdles in Congress because it does not offer as much new federal funding as Democrats want or directly address how to pay for the effort.

The plan to use $200 billion in federal funds to try to stimulate $1.5 trillion in infrastructure improvements over 10 year could reshape how the federal government funds roads, bridges, highways and other infrastructure. The administration also says it will eliminate bureaucratic roadblocks to completing projects that can tie up new roads for years.

White House Budget Director Mick Mulvaney said on Sunday that in addition to the $200 billion the administration seeks for its infrastructure proposal, the White House wants $21 billion over two years for infrastructure that was part of a budget framework deal approved last week in Congress.

Mulvaney said in a statement that the plan “reduces the regulatory burdens we face, shortening and simplifying the approval process for projects, and eliminating barriers that prevent projects from being efficiently developed.”

But in the face of a divided U.S. Senate and congressional elections in November, administration officials acknowledged the plan faced a difficult road to winning approval.

White House aides told reporters in a phone briefing on Saturday that the proposal, billed only as “infrastructure principles” and to be part of Trump’s budget plan on Monday, was just a starting point.

“This in no way, shape or form should be considered a take-it-or-leave-it proposal. This is the start of a negotiation – bicameral bipartisan negotiation – to find the best solution for infrastructure,” said a senior official, who was not allowed to be identified under the ground rules for the briefing.

The White House is pointing to a wide variety of potential cuts in its budget proposal that could be used to offset the costs of the plan.

HIKE IN GAS TAX?

The White House proposal will offer $100 billion in incentives to state and local governments, but will propose a smaller percentage of matching finds than the federal government has typically offered.

The remaining $100 billion involves $50 billion for rural project grants distributed to all states, $30 billion for government financing of projects and $20 billion toward “transformative projects” or new ideas that are not simply repairing existing infrastructure.

Democrats insist that any plan must include new revenue, which could mean raising the federal gas tax. That levy has been 18.4 cents a gallon since 1993, and inflation as well as rising vehicle fuel efficiency have reduced its usefulness in raising enough money to keep pace with repair needs.

Government auditors note Congress transferred $140 billion to the Highway Trust Fund from 2008 through 2015. Lawmakers, to maintain current spending levels, would need to approve an additional $107 billion from 2021 through 2026.

Trump has not ruled out a gas tax hike and some in Congress have said they are open to the idea. The U.S. Chamber of Commerce recently came out in support of an increase.

Democrats in Congress called last week for $1 trillion in direct federal spending, including $100 billion on schools alone as well as billions to expand rural broadband internet service, improve airports, mass transit, roads and ports, boost energy efficiency and improve aging water systems.

The Democratic proposal did not identify any specific plan to pay for improvements, but aides said they were committed to finding a way.

The administration also plans on Monday to unveil workforce training proposals, including expanding apprenticeships and seeking changes to federal work-study programs that typically are used by students at four-year institutions. It would allow more students interested in skilled trades to use them.

It will propose as well that states that accept federal funds for infrastructure projects would have to accept workers with out-of-state skilled-trades licenses on those projects.

Trump will meet with state and local officials including the governors of Wisconsin, Louisiana, Virginia and Maine on Monday, before meeting with congressional leaders on Wednesday. He will head to the Orlando, Florida, area on Friday to tout the plan, officials said.